The Panama Canal Can Save Barack Obama

A man. A plan. A canal. Panama. It makes you think of Theodore Roosevelt, right? Now it might make you think of President Obama, as well.

Obama on Thursday is visiting Jacksonville, Florida, where he’s touring the port and giving some remarks. The purpose of this speech is to promote his plans for infrastructure projects, as part of the broader economic strategy that he’s been talking up for years and described again in his speech yesterday.

The case for it goes like this: The roads and runways that move people and freight, the power lines and microwaves that carry voices and data—all of these need upgrading. Building up this infrastructure will not only make our country more productive, creating more wealth. It will also improve our quality of life. People traveling from Detroit to Chicago will be able to ride a high-speed train, rather than sit in traffic on I-90. People using smartphones won’t have to wait so long for connections. People hunkering down in hurricanes won’t have to worry so much about losing power or drinking water.

Is government spending for such projects the best possible use of such resources, and worth the trade-off in higher taxes, lower spending elsewhere, and/or more debt? That’s obviously a matter on which reasonable people can disagree. But the timing for infrastructure spending would seem ideal. Persistently high unemployment means there are tons of people who need, and want, the work. Low interest rates mean borrowing money is ridiculously cheap. That last part is particularly important, and why even some (not all) economists who tend to be more skeptical of government spending think infrastructure spending makes sense right now. “The best reason to do infrastructure spending in a downturn is not because of some mythical Keynesian multiplier,” Andrew Samwick, the Dartmouth economist, wrote earlier this year. “The best reason to do it is because you have to do it at some point and the cheapest time to do it is in a recession, when both labor and capital are underutilized and available more cheaply than in business cycle upturns.”

You’ve heard much of this before, ok. But why the Port of Jacksonville? And what does it have to do with the Panama Canal? I’m glad you asked, because I looked into this very question a few weeks ago.

Today about a third of the world’s overseas cargo travels on super-freighters that can rise nearly 200 feet out of the water and are bigger than aircraft carriers. They are also too big to fit through the Panama Canal’s locks, which were built a hundred years ago. The largest freighters going through the locks today can hold about half as much cargo. (They care called “Panamax.” The new frieighters are called “Post-panamax.”) So if you run a factory in, say, North Carolina, and you’re exporting goods to Asia, then you’ll probably end up putting the goods on trucks or a train, then shipping them over land to the port of Los Angeles, where a super-freighter can pick up the goods and move them the rest of the way.

Popular Mechanics

WE'RE GOING TO NEED A BIGGER BOAT

What the Panama Canal can handle now—and will in the future.

The Canal has been undergoing massive renovations. (Popular Mechanicshas the details if you want to know more.) Starting next year, a new set of wider locks will allow the super-ships to use the Canal, redrawing the global transportation map and making it possible to ship goods directly from Atlantic ports to Asia (and vice versa). But not all Atlantic ports can handle the traffic. Baltimore, Miami, New York and Norfolk are ready now or have renovation plans in the works. But a bunch of southeastern ports—Charleston, Savannah, and, yes, Jacksonville—aren’t ready to take full advantage of the new traffic. The people who run them—and the lawmakers who listen to them—are hoping for some federal funding, on the sensible argument that this is precisely sort of investment the government has made in the past, because it helps not just the cities with those ports but their regions and, to a lesser extent, the country as a whole. They argue, for example, that companies may build or move factories to Brazil, which already has 13 ports that can handle post-Panamax ships.

Is it a given that all of these Atlantic ports in the U.S. should get funding? No. But, as far as I know, President Obama isn’t proposing to “earmark” funds for these ports. Rather, he hopes to allot money for transportation infrastructure and then have cost-benefit review, so only those investments that promise the highest return receive federal assistance. It’s the same basic approach that the Recovery Act took to investment and, notwithstanding the public criticism, won widespread praise for allocating money efficiently. (For more on that, read Michael Grunwald’s The New New Deal.)

Once upon a time, conservatives supported infrastructure projects, particularly if they could imagine benefit for their communities. Lately that hasn’t been the case, although some Republicans have started to make the case for new investments. Among them are Lindsey Graham, whose state happens to include one of the ports most likely to get funding (Charleston) and who has been visibly frustrated with the knee-jerk opposition to any spending some of his colleagues show. As I wrote in my piece, it’s at least possible—if not quite likely—that within such support lies the foundation of a coalition that could support a broader infrastructure measure. As Greg Sargent reminds us, it wasn’t that long ago Republicans supported infrastructure investment. Maybe it can happen again.

Jonathan Cohn is a senior editor at the New Republic. Follow him on twitter @CitizenCohn